Part III
Substantive Law
Introduction
Going beyond an internal market in goods, the EU Treaties also envisage the free movement of persons. This constitutional choice was originally inspired by an economic rationale. The second fundamental freedom had been created to assist people wishing to work in another Member State and was consequently confined to economically active persons. The Treaties thereby distinguished between two classes of economic migrants: ‘employed’ and ‘self-employed’ persons; and the Treaty Title dealing with the movement of persons today still addresses ‘Workers’ and the ‘Right of Establishment’ in two separate chapters. The establishment chapter thereby not only covers natural persons but also, importantly, the rights of companies.
With subsequent Treaty amendments, these two special chapters were nevertheless complemented by the ‘horizontal’ rules on Union citizenship; and with the introduction of the citizenship provisions, the Union has (partially) cut the economic link that traditionally connected persons to EU free movement rights. The Union’s citizenship rules grant every citizen the (limited) ‘right to move and reside freely within the territory of the Member States’.
What is the scope of these three sources of rights with regard to the free movement of persons? This chapter hopes to explore each source individually as well as the horizontal connections between them. Sections 1 and 2 analyse the special free movement rights for economically active persons; that is: workers and self-employed professionals, while section 3 specifically explores the free movement rights of companies (and their subsidiaries). An overview of the relevant Treaty provisions can be found in Table 15.1.
When compared to the free movement of goods provisions – discussed in Chapter 13 – two fundamental differences can here immediately be noted. First, the free movement of persons provisions do not expressly distinguish between regulatory and fiscal barriers to trade; and the Court has confirmed that both fall within the same free movement provisions. Second, and again unlike the free movement of goods, the Treaty chapters on workers and establishment only each contain one central prohibition outlawing restrictions on the free movement of persons.
The concentration of all ‘negative’ integration into a single provision for workers and a single provision for the self-employed appears to make the legal regime governing the free movement of persons much less complex than the fragmented constitutional regime governing the free movement of goods. Yet, beware: the opposite is the case! The high complexity within this area of EU law thereby stems from two roots. First, each of the Treaty chapters contains a number of special harmonisation competences to positively assist the Union to establish the free movement of persons. These competences have been widely exercised; and for this reason, the Union law governing persons is a rich and complex amalgam of primary and secondary law. However, the complexity within this area also has a second root: the existence of general free movement rights granted to all European citizens. Section 4 explores these general rights and their relationship to the special movement rights for workers and the self-employed.
Section 5 – finally – analyses the horizontal rules that govern the various justifications for national restrictions on the free movement of persons. In addition to the ordinary public policy justifications, the main derogation here is a public service exception that allows Member States to restrict access to professions that are linked to the exercise of public authority. In order to better distinguish the various elements and overlapping aspects of the free movement of persons provisions, Figure 15.1 offers a first schematic arrangement that should be kept in mind when studying this chapter.
Cases
Legislation
EU Regulations
Regulation (EEC) No. 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community, [1968] OJ English Special Edition 475
Regulation (EEC) No. 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, [1971] OJ English Special Edition 416
Council Regulation (EEC) No. 2137/85 of 25 July 1985 on the European Economic Interest Grouping (EEIG), [1985] OJ L 199/1
Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company, [2001] OJ L 294/1
Council Regulation (EC) No. 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE), [2003] OJ L 207/1
Regulation (EC) No. 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, [2004] OJ L 166/1
Regulation (EU) No. 492/2011 of the European Parliament and of the Council of 5 April 2011 on freedom of movement for workers within the Union, [2011] OJ L 141/1
EU Directives
Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids, [2004] OJ L 142/12
Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, [2004] OJ L 158/77 (Citizenship Directive)
Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications, [2005] OJ L 255/22
Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies, [2005] OJ L 310/ 1
Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies, [2007] OJ L 184/17
Directive 2009/101/EC of the European Parliament and of the Council of 16 September 2009 on coordination of safeguards which, for the protection of the interests of members and third parties, are required by Member States of companies within the meaning of the second paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent, [2009] OJ L 258/11
Directive 2011/35/EU of the European Parliament and of the Council of 5 April 2011 concerning mergers of public limited liability companies, [2011] OJ L 110/ 1
Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/ EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC, [2013] OJ L 182/19
Figures
Extra Materials
Useful Videos
Useful websites
Further Reading
Books
C. Barnard, The Substantive Law of the EU: The Four Freedoms (Oxford University Press, 2013)
J. Borg-Barthet, Governing Law of Companies in EU Law (Hart, 2012)
M. Fuchs and R. Cornelissen, EU Social Security Law (Beck-Hart-Nomos, 2015)
E. Guild et al. (eds), The EU Citizenship Directive: A Commentary (2nd edn, Oxford University Press, 2019)
D. Kochenov (ed.), EU Citizenship and Federalism: The Role of Rights (Cambridge University Press, 2018)
N. de Luca, European Company Law (Cambridge University Press, 2021)
N. Nic Shuibhne, EU Citizenship Law (Oxford University Press, 2023)
N. Nic Shuibhne (ed.), Revisiting the Fundamentals of the Free Movement of Persons in EU Law (Oxford University Press, 2023)
J. Pennings, European Social Security Law (Intersentia, 2010)
A. Tryfonidou, The Impact of Union Citizenship on the EU’s Market Freedoms (Hart, 2016)
F. Weiss and C. Kaupa, European Union Internal Market Law (Cambridge University Press, 2014)
Articles
E. Fahey, ‘Interpretive Legitimacy and the Distinction between “Social Assistance” and “Work-seekers’ Allowance”: Comment on “Vatsouras”’ (2009) 34 EL Rev 933
H. Fleischer, ‘Supranational Corporate Forms in the European Union: Prolegomena to a Theory on Supranational Forms of Association’ (2010) 47 CML Rev 1671
S. Grundmann, ‘European Company Law in Transformation—Striving for Participation and Sustainability’ (2023) 42 Yearbook of European Law 210
C. O’Brien, ‘Real Links, Abstract Rights and False Alarms: The Relationship between the ECJ’s “Real Link” Case Law and National Solidarity’ (2008) 33 EL Rev 643
N. Rennuy, ‘The Emergence of a Parallel System of Social Security Coordination’ (2013) 50 CML Rev 1221
W.-H. Roth, ‘From “Centros” to “Ueberseering”: Free Movement of Companies, Private International Law, and Community Law’ (2003) 52 ICLQ 177
E. Spaventa, ‘From “Gebhard” to “Carpenter”: Towards a (Non-)economic European Constitution’ (2004) 41 CML Rev 743
D. Thym, ‘The Elusive Limits of Solidarity: Residence Rights of and Social Benefits for Economically Inactive Union Citizens’ (2015) 52 CML Rev. 17
A. Tryfonidou, ‘In Search of the Aim of the EC Free Movement of Person Provisions: Has the Court of Justice Missed the Point?’ (2009) 46 CML Rev 1591
How to Find (and Read) the EU Treaties
The EU Treaties constitute the primary law of the Union. The formula the ‘EU Treaties’ or simply ‘the Treaties’ commonly refers to two Treaties: the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU).
The ‘Treaties’ are the result of a long ‘chain novel’ of consecutive treaties (see Table 20.1). They started out from three ‘Founding Treaties’ that created the European Coal and Steel Community (1951), the European Atomic Energy Community (1957) and the European (Economic) Community (1957). A myriad of subsequent ‘Amendment Treaties’ and ‘Accession Treaties’ gradually changed the textual basis of the three Communities significantly; and this first treaty base would be complemented by a second treaty base in 1992, when the Maastricht Treaty created the (old) European Union.
To simplify the – very complex – textual foundations of the old European Union and European Communities Treaties, the Member States tried to create a single treaty in the early 2000s. The 2004 Constitutional Treaty was indeed intended to repeal all previous treaties; and it was to merge the European Union with the European Communities. Yet the attempt to ‘recreate’ one Union, with one legal personality, on the basis of one treaty failed; and the Member States thereafter resorted to yet another ‘Amendment Treaty’: the 2007 Reform Treaty – also called the Lisbon Treaty.
Despite its modest name, the Lisbon Treaty constitutes a radical new ‘chapter’ in the Union’s constitutional chain novel. For while it formally builds on the original ‘Founding Treaties’, it has nonetheless ‘merged’ the old ‘Community’ legal order with the old ‘Union’ legal order into a new ‘Union’ legal order.
Nevertheless, unlike the 2004 Constitutional Treaty, the 2007 Lisbon Treaty has not created a single treaty base for the European Union. Instead, it recognises the existence of two (main) treaties: the Treaty on European Union and the Treaty on the Functioning of the European Union. The division into two EU Treaties thereby follows a functional criterion: the Treaty on European Union (TEU) contains the general provisions defining the Union, while the Treaty on the Functioning of the European Union (TFEU) contains the specific provisions with regard to the Union institutions and policies. One of the new features of the post-Lisbon era is the possibility of minor treaty amendments instigated by European Council Decisions.
In addition to ‘Amendment Treaties’ there are now also ‘Amendment Decisions’ adopted by the European Council (see Table 21.4). The EU Treaties can today be found on the European Union’s
EUR-Lex website: http://eur-lex.europa.eu/collection/eu-law/treaties.html, but there are also a number of solid paper copies such as Blackstone’s EU Treaties & Legislation or my own EU Treaties and Legislation collection. What is the structure of today’s EU Treaties? The structure of the TEU and TFEU is shown in Table 20.4. The (longer) TFEU is divided into ‘Parts’ – ‘Titles’ – ‘Chapters’ – ‘Sections’ –‘Articles’, while the (shorter) TEU only starts with a division into ‘Titles’. The EU Treaties are joined by numerous Protocols and the ‘Charter of Fundamental Rights’. According to Article 51 TEU, Protocols to the Treaties ‘shall form an integral part thereof’; and the best way to make sense of them is to see them as legally binding ‘footnotes’ to a particular article or section of the Treaties.
By contrast, the Charter is ‘external’ to the Treaties; yet it also has ‘the same legal value as the Treaties’.
How to Find (and Read) EU Secondary Law
The Union publishes all of its acts in the Official Journal of the European Union. Paper versions can be found in every library that houses a ‘European Documentation Centre’, but electronic versions are also openly available on the Union’s EUR-Lex website: http://eur-lex.europa.eu/oj/direct-access.html. The Union distinguishes between two Official Journal series: the L-series and the C-series. The former contains all legally binding acts adopted by the Union (including its international agreements), while the latter publishes all other information and notices. Originally, only the paper version of the Official Journal was ‘authentic’; but since 1 July 2013, electronic versions of the Official Journal (e-OJ) are equally authentic and therefore endowed with formal legal force.
Union secondary law will first mention the instrument in which it is adopted. It will typically have the form of a ‘Regulation’, a ‘Directive’ or a ‘Decision’. This will be followed by two figures. In the past, where the Union act was a regulation, the figure was: number/year; while for directives and decisions this was inversed: year/number. However, since 2015, this has changed and all main Union instruments are now arranged by year/number.treaty base would be complemented by a second treaty base in 1992, when the Maastricht Treaty created the (old) European Union.
Where the year and number are known for a given EU act, the easiest way to find it is to use the Union’s EU-lex search engine: http://eur-lex.europa.eu/homepage.html. Importantly, there may be two or more acts for a given number combination, especially where a ‘legislative’ act has been followed by a non-legislative act. For two types of non-legislative acts – namely: ‘delegated’ and ‘implementing’ acts – the EU Treaties require that they contain the word ‘delegated’ or ‘implementing’ in their title. This is to indicate – at first glance – that these executive acts have been adopted according to a particular decision-making procedure. States thereafter resorted to yet another ‘Amendment Treaty’: the 2007 Reform Treaty – also called the Lisbon Treaty.
What is the structure of a piece of Union legislation? After its ‘Title’ there follows a brief summary of the decision-making procedure that led to the adoption of the act – including a reference to the legal competence on which it was based. Thereafter comes the ‘Preamble’, which sets out the reasons for which the Union act has been adopted. The content of the act is subsequently set out in various ‘articles’, which may be grouped into ‘Sections’ and ‘Chapters’. For very technical Union legislation, there may also be an Annex – which, like a ‘Schedule’ in a UK statute, adds detailed provisions ‘outside’ the core content of the act. To illustrate this legislative structure, let us take a closer look at the Services Directive as it would be published in the Official Journal.
How to Find (and Read) EU Court Judgments
All EU cases are identified by a number/year figure. Cases before the Court of Justice are preceded by a C-, while cases decided before the General Court are preceded by a T-( for the French ‘Tribunal’).7 The Civil Service Tribunal prefixed its cases with an F-( for the French ‘Fonction publique’). Following this unique figure come the names of the parties to the case. A full case name would for example be: Case C-144/ 04, Werner Mangold v. Rüdiger Helm. However, since no one can remember all the numbers or all the parties, EU cases often get simply abbreviated by the main party; in our case Mangold.
In the past, judgments of all EU Courts were published in paper form in the purple-bound European Court Reports (ECR). Cases decided by the Court of Justice were published in the ECR-I series; cases decided by the General Court were published in the ECR-II series, while cases decided by the Civil Service Tribunal were published in the ECR-SC series. However, as of 2012, the entire Court of Justice of the European Union decided to go ‘paperless’ and it now publishes its judgments only electronically.8 The two principal websites here are the Court’s own curia website (http://curia.europa.eu/jcms/jcms/j_6), and the Union’s general EUR-Lex website (http://eur-lex.europa.eu/homepage.html). For the purposes of this book, the easiest way is however to go to www.schutze.eu, which contains all the judgments mentioned in the main text – including the ‘Lisbon’ version of all classic EU Court judgments.
Once upon a time, judgments issued by the European Court were – to paraphrase Hobbes –‘nasty, brutish and short’. Their shortness was partly due to a structural division the Court made between the ‘Issues of Fact and of Law’ (or later: ‘Report for the Hearing’), which set out the facts, procedure and the arguments of the parties, on the one hand, and the ‘Grounds of Judgment’ on the other. Only the latter constituted the judgment sensu stricto and was often very short indeed. For the Court originally followed the ‘French’ ideal of trying to put the entire judgment into a single ‘sentence’! A judgment like Van Gend en Loos contains about 2,000 words – not more than an undergraduate essay.
This world of short judgments is – sadly or not – gone. A typical judgment issued today will, on average, be four to five times as long as Van Gend. (And in the worst-case scenario, a judgment, especially in the area of EU competition law, may be as long as 100,000 words – a book of about 300 pages!) This new comprehensiveness is perhaps the product of a more refined textualist methodology, but it also results from a change in the organisation and style of judgments. Modern judgments have come to integrate much of the facts and the parties’ arguments into the main body of a ‘single’ judgment, and this has especially made many direct actions much longer and much more repetitive! The structure of a modern ECJ judgment given under the preliminary reference procedure may be studied by looking at Figure 20.2.
How to Find EU Academic Resources
The literature with regard to European Union law has exploded in the last 30 years. Today, there exists a forest of European law journals and generalist textbooks. Moreover, since the mid 1990s ‘European’ law has increasingly developed specialised branches that are sometimes even taught separately at university (as is the case at my own university). The three main branches here are: European constitutional law, European internal market law and European competition law. The first was explored in Parts I and II, while the second branch (and elements of the third branch) were covered in Part III. In addition to these three ‘bigger’ branches, the last two decades have also seen the emergence of many ‘smaller’ branches, such as European external relations law, European labour law and European environmental law. And there now also exist specialised LLM courses on EU consumer law and EU tax law.
The list of journals (Table 21.5) is by no means comprehensive. It is meant to point the interested reader to a first gateway for an in-depth study of a particular part of European Union law. My selection focuses primarily on English-language academic sources. But it goes without saying that European Union law is a ‘European’ subject with journals and textbooks in every language of the Union.
